Australia posts sharp rise in consumer confidence in November

“This is an extraordinary and somewhat surprising result. November marks the first ‘net positive’ read on consumer sentiment in the best part of four years. Recall that an index above 100 means optimists outnumber pessimists. This is the first time this has happened since February 2022. Indeed, excluding the COVID disruptions in 2020 and 2021, this is the most positive result in seven years,” said Westpac’s head of Australian macro forecasting Matthew Hassan in a press release.

“Much of the November sentiment gain is coming from a markedly more confident assessment of prospects for the economy. The ‘economic outlook, next 12 months’ and the ‘economic outlook, next 5 years’ sub-indexes both jumped sharply in the month (up 16.6 per cent and 15.3 per cent respectively). Both sub-indexes are now in solid positive territory, well above long-run averages,” he noted.

But the real surprise is how much these positives have outweighed renewed concerns about inflation and the outlook for interest rates, he remarked.

Despite their improved confidence around the outlook for the economy and family finances, Australian consumers are more anxious about jobs.

The institute’s unemployment expectations index rose by 9.3 per cent to 139.5 in November. “The deterioration seems to reflect conditions on the ground, with recent labour force updates showing a renewed softening in employment growth and a lift in unemployment,” Hassan reflected.

“More promising though, especially for retailers, is a big lift in buyer sentiment. The ‘time to buy a major item’ sub-index surged 14.9 per cent to 111.6 in November, a four-year high,” he added.

ALCHEMPro News Desk (DS)